Civilization may have started out with an emphasis on hunting and gathering, but it wasn’t long before bartering entered the picture. The marketplaces (Roman or otherwise) that were created long ago were no Amazon or Tmall, but they did the job. Just a couple of centuries ago, retail slowly started to become more organized and modern familiar forms of commerce were introduced.
The shift from bartering to the various forms of shopkeeper (the butcher, baker, and candlestick maker) took quite some time. In the nineteenth century, aspects of retail started to become more professionalized, as both specialty stores and department stores made their debut in many major cities in the US, Europe, Japan, and a few other regions.
The end of the century saw the advent of the mail-order catalog, which held the promise of bringing big-city shopping to small towns and rural areas. Sears, JCPenney, and Montgomery Ward were the early pioneers, becoming large, iconic brands in subsequent decades.
Various formats evolved and expanded during the first half of the twentieth century, but as the post–World War II economic boom took hold, more and more consumers headed to the suburbs to pursue the American Dream. Regional malls started to be built all over the country, and the once-dominant mail-order retailers (and a handful of more upscale department stores) became their anchor tenants. Within two decades, malls had become the predominant retail format for many shoppers, and Sears was the king of the hill, becoming one of the ten most valuable companies in America in the 1970s.
The seeds of big change, however, had begun germinating a few years earlier. During the 1960s, Walmart, Kmart, Zayre, Woolco, and others started opening their twist on general merchandise stores. Located off the mall, with lower prices and less service, these rapidly expanding brands offered a more convenient and more value-oriented alternative that many shoppers found appealing.
Eventually came the emergence of so-called category killers. Similarly offering off-the-mall convenience coupled with a strong value orientation, Toys “R” Us, The Home Depot, PetSmart, Staples, Circuit City, and dozens of others started to open thousands of stores with huge assortments focused on more particular shopping occasions.
By the 1990s, retail offerings became more diverse and targeted. There were variations at one end of the value spectrum (off-price, outlet stores, dollar stores, warehouse clubs) as well as the other (Neiman Marcus, Bloomingdale’s, all manner of high-end designer boutiques). Niche players in organic grocery, cosmetics, fashion, and home furnishings became more plentiful and joined the common tenant mix in power centers and lifestyle malls across the country. Home shopping (Home Shopping Network and QVC) became a phenomenon.
Most of these started to take a big bite out of the once-dominant regional mall-based department stores. In particular, the growth of fast-fashion and off-price retail stole significant share from moderate department stores during the decade, as did the emergence of off-the-mall home stores like Bed Bath & Beyond and Linens ’n Things and beauty-focused concepts like Ulta and Sephora, among others.
As we approached the new century, forces were gathering that would lead to profound and unprecedented disruption. Jeff Bezos, Steve Jobs, and a cadre of venture capitalists started to see how technology could completely change the face of retail. While the initial wave led to some really dumb and unsustainable business models (anybody remember Pets.com?), large companies such as Nordstrom and Williams-Sonoma saw the potential and began investing in e-commerce and digital technology. Amazon began diversifying away from its original books-and-music offerings. Intrepid investors began getting excited about a second wave of online shopping businesses.